2 roadblocks to US energy independence
Political opposition to Canadian tar-sands oil and the still expensive natural-gas engines would stand in the way of IEA predictions of self-sufficiency by 2020.
In a moment when nothing makes us happy, we got a nice feel-good story Monday, that the IEA, the International Energy agency, says we will be energy self-sufficient in 2020 and overtake the Saudis as the biggest exporter of oil in 2030.
To which I say, oh, please, we will never ever again be nationally self-sufficient, but we could be continental self-sufficient, and that in itself would be a big deal.
But we can only do it in two ways: 1.) Choosing to view the Canadian tar sands oil as regular oil that can be refined cleanly, as Honeywell (HON), which makes the refining chemicals, says it can be, and 2.) we switch to natural gas surface fuel.
I don't have great hopes for either under President Obama, and that means you are going to have to start the sufficiency drive in 2017, which doesn't give you a whole heck of a lot of time.
First, the anti-fossil-fuel nonprofits were important to Obama's election. They have no desire to allow Canadian heavy oil to come into the States. I think they are powerful enough to stop it, and that means we will continue to import oil from Venezuela and the Middle East. OPEC wins.
Second, although I had a very optimistic David Demurs from Westport Innovations (WPRT) on the show tonight, the premier nat-gas engine maker, it is very clear that the demand for nat gas engines isn't up to snuff -- hence the missed quarter -- in part because the infrastructure is just not there to pump. Until it is, nat-gas engines remain ultra-niche.
We have a lot more oil than people think we do here in the U.S. But it is mostly contained in the Bakken and Eagle Ford. I have been saying that both could be as big as Prudhoe Bay.
But what we really have excess of, more than anywhere in the world, is natural gas. Unless you can turn natural gas into gasoline, you cannot be as hopeful as the IEA is. That's because the big users of imported oil are trucks. They use one-quarter of our oil. Unless the government can force them to use compressed natural gas (CNG) or liquefied natural gas (LNG), they are not going to switch. Why bother? Sure, the savings are great, but the engines are expensive, and how many places can you really fill up at?
So, breathe a sigh of relief. Get excited about energy self-sufficiency, but remember it can only happen with Canadian crude and CNG/LNG, and right now none of those has the support of the U.S. government.
Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and has no positions in stocks mentioned.
More from TheStreet.com
Congress choice to investigate Petraeus ! Like the Fox guarding the Hen House ! It is not Congress choice it is We the American People's choice TO KNOW WHAT HAPPENED ? SCREW CONGRESS investigate the General !
Name ANY nation that, for ANY reason, is disregarding ANY of its' natural resources!
THAT IS REASON ENOUGH WHY WE SHOULD NOT BE HUMORING ANY IDIOTIC NOTION OF DOING ANY SUCH THING!
I think the Obama approach is correct if indeed he follows that path. An all inclusive energy mix near evenly distributed between oil, coal, nat gas, nuclear, water, wind, and solar. We need a gradual but staedy turnover from oil and coal to cleaner fuels such as nuclear, water, and nat gas. In the future, having 25% of our energy produced from renewable wind and solar is a legitimate and reachable goal. With water, that could go up to 40%.
Oil will have to remain the primary transportation fuel for decades, but the natural evolution towards electric and natural gas will occur. Start with powering the semi tractor trailers away from diesel and into LNG. That is where to start and will dramatically reduce harmful emmisions. CNG can transistion with public transportation, and electric with government vehicles, rentals, and leases. The infrastructure will be much simpler to construct if given local and specific parameters. Personal vehicles will have to be the last to transistion, if at all. The national infrastucture to build out will not likely be cost effective in our lifetime.
I don't think it is a good idea to have any one specific form of energy as becoming too dominant. Spreading it out near evenly gives us plenty of options as technology evolves while not becoming too dependant on any one source. Also keeps our workforce and education sectors fully engaged.
Thank God we have the right guy in the WH who will be open to all types of energy.People
with education realize that.
Here Israel is about to attack Iran and the leaders of our CIA and the military are online writing tens of thousands of sexually explicit e-mails to call girls. probably a lot of phone sex in between given how horny they were. How much time could have been left over for briefings?
Meanwhile Israel's enriched uranium line in the sand deadline with Iran keeps coming. April I believe it was. If you were playing chess would you wait until the last possible moment to attack or preempt JUST in case your enriched uranium calculations were wrong and April becomes too late
How much our deficit is funded by Saudi Arabia and other friendly Middle East oil countries. Was a deal to do so struck with them long ago if the need should ever arise? Maybe for building the place for them and giving protection when needed? And keeping the dollar as the fiat currency for purchasing oil forever
Let me phrase it another way. What if Exxon was only allowed a generous 50% mark-up over production costs instead of putting their product in a World Market Pool where they can sell it to the highest bidder. What would the price of oil and gas be then?
What would be the price of oil and gas if there was a law that said all oil found on US soil MUST be consumed on US soil
If we had nationalized energy like they do in most of the REST of the world including Canada and Mexico, we could convert to natural gas without being obsessed with the need to make a large profit off of it
the uneducated conservatives say they want to take our country back, but they don't say
how far back.......perhaps back to flat earth christianity
Whatever would Exxon Mobil do if we switched everything to natural gas and no longer needed their vast oil reserves. The price for oil would drop like a rock. Better to put it off as long as possible, huh. It's called logic
cramer has been pushing dividend stocks .....hmmm no wonder they're getting crushed
cmon fools .....dividends can be cut at any time and provide negligible protection
MORE ON MSN MONEY
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
All hail the bull market, which ended the week with a big rally. But it also is starting to look a little like 1987, which suffered an epic blow-out.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.